Apples and Oranges

"Here tonight, we have, ah, apple and orange. We all different, but in the end, we all fruit."
     - Gus Portokalos, from My Big Fat Greek Wedding, 2002

In a post titled "Apples to Apples", I proposed an easy way to compare the costs of leases of identical duration... for each offer being compared, simply total up the drive-off and all the payments over the lease term. Just like in golf, the lowest total wins.

But what if you're mulling over whether to lease or buy a particular vehicle, with the end goal of owning it free and clear? Well, back in the old days when I used to lease ICE vehicles, circa 2013, I found it was pretty much a wash dollar-wise between leasing and buying, assuming that a leased vehicle would be bought for its residual amount at the end of the lease term. Lease charges over the three years seemed to be within spitting distance of finance charges on the first three years of a six-year loan, and the loan balance after three years was about the same as the residual on a lease. So typically I chose to lease because it resulted in lower payments, tax on only part of the negotiated sales price, and an easy out at lease termination.

With electric vehicles, the decision is sometimes a bit more complicated. Sometimes choosing a lease over a purchase with the intent to own isn't only about minimizing up-front cost, lowering monthly payments, and enjoying the convenience of haggle-free disposal at termination if you change your mind about keeping it. Total cost might be a major factor, because the cost comparison is muddied by the federal tax incentive for EVs. Top that with the fact that some manufacturers offer different rebates on the same vehicle that hinge on whether you buy or lease, and the least expensive path to ownership becomes even less clear.

Let's cut to the chase... Below is a comparison between leasing and purchasing for the Toyota RAV4 EV, Chevrolet Volt, and Ford Focus Electric. With the current offers available, it's significantly cheaper to buy the Volt and FFE rather than lease, so long as the plan is to keep the car for longer than 3 years.  As for the RAV4 EV, it's much cheaper to lease first, and then take ownership by paying the residual at lease termination. The Grand Total line in the table below sums it all up for each of the three vehicles.

For the RAV4 EV, I used the Carson Toyota offer posted in June 2014 on myRav4EV.com by Dianne Whitmire, which included both lease and purchase offers. The lease offer I used was for 12K miles/year. Clearly, the huge $16.5K rebate on a lease far outweighs the $10K total incentive (rebate plus federal tax credit) on a purchase, making the lease a much more desirable option. $38K with sales tax included and before any state incentive is a heck of a deal on a $50K vehicle. 

For the Volt, I took Rydell Chevrolet's offer from their June 16, 2014 print ad, which gave folks a choice between a $246/month + tax, 10K miles/year lease, or $4500 off of a purchase on top of a $1000 rebate, on base models with an MSRP of $34,995. What makes this lease offer unattractive for those wishing to keep the Volt longer than three years is the inflated residual value, a whopping 61% of the purchase price (aka capitalized cost in lease lingo). Most vehicles have a 50% or less residual for a 3-year lease; for example, the RAV4 EV deal shown above is at 41%, and the FFE deal is at 48%. I've heard FFE lease deals go as low as 41% to 43% on higher-mileage leases.  Where Toyota and Ford properly channel the federal tax benefit back to the consumer in the form of an immediate rebate, US Bank and Ally apparently decided to pocket the tax credit and then set the residual artificially high on their Volt leases to synthesize an attractive monthly payment. Bottom line... if you want to keep a Volt for the long haul, don't even consider leasing it. Buy it instead... $25K with tax included is a great deal for a shining example of what corporate America is capable of producing when they decide to do the right thing. And that's not even including any state incentives.

As for the Focus Electric, I didn't use an offer published by a dealership because, well, I just couldn't find any. So I took an recent killer lease deal posted on myfocuselectric.com by a forum member for an FFE with leather and premium paint, 10.5K miles/year. The deal was based on an offer that was initiated through the Costco Auto Program, which at the time was good for $1000 under invoice. In this case, the lease deal is incredible, but the deal on a purchase is epic. How many other new cars can be had for under $23000, tax included? Okay, so there's lots of them. But of those, how many have leather? And a rear camera? Navigation? Seating for five? More cargo space than a 3-series or C-class? Oh yeah, how about a fully electric drivetrain and a state rebate that would, at least in California, whittle down the cost to something pretty darn close to $20,000? All things considered, it seems that the FFE is currently the best $20K car that money can buy, electric or otherwise. One might argue that the killer deal I used as an example is unachievable for most folk since inventory is pretty slim in most areas. Unfortunately that's probably true for those outside of The Golden State, but it does serve as a well-documented benchmark. In my opinion, even if  you can only negotiate $1000 off of MSRP rather than $1000 under invoice, the FFE rebates still make for one of the best new car values on the planet.

The RAV4 EV, Volt, and Focus Electric probably represent three of the most extreme examples where the total dollars shelled out toward ownership are drastically affected by a choice between leasing and buying. There are others... for example, the BMW i3 currently has a $4875 lease incentive, but no purchase incentive. In this case it should be cheaper to buy the i3 rather than lease and then pay the residual. Why? Well, If the lease incentive is not more than $7500 over the purchase incentive, chances are that the lease will be a more expensive path to ownership.This comparison of the manufacturer incentives offered for leasing versus buying is probably the best indicator of which one is the cheaper path to ownership.

Another factor to consider, which you are probably already aware of but might be worth mentioning for others that are new to this, is whether or not your total federal tax liability next year will be large enough to take full advantage of that $7500 federal tax credit. If not, you should seriously consider using a lease as an instrument to finance your quest for ownership. Look at it as a loan with a low monthly installment for 3 years, and then one huge balloon payment in the end that can be financed with a used car loan.

One more thought... most folks don't pay cash when buying a new car. More likely than not, they will finance it. So for the case where a purchase looks better than a lease (i.e. FFE and Volt),  how should the interest on a loan be factored into the decision? My advice is to plug some numbers into an auto loan calculator, like this one on bankrate.com. Model a 7-year loan for the full purchase amount with tax, minus the fed rebate and any manufacturer rebates. Interest rate for such a loan looks to be about 2.5% to 3%. Then look at the total interest paid after 36 months into the loan. For the FFE and Volt examples above the total interest paid after 3 years will only be about $1400 to $1500, which is much less than the $4000 (FFE) to $8000 (Volt) benefit of buying over leasing. In other words, for the Volt and FFE, a financed purchase is still much cheaper than a lease if your intent is to keep the car for over three years.

Still clear as mud on which way to go? Just do the math both ways based on your situation, and let the numbers guide you. Need help? Post your numbers below, and I'd be happy to take a crack at it, see what we see...

Fill 'er up!

It took a while, almost four months and over 3400 miles, but it finally happened... the low fuel light came on in the Volt. Just prior to the warning, the dash indicated that I still had 37 miles of gas range left, so for the most part I've been ignoring the warning the last couple of weeks. I've only needed maybe two to seven miles of non-EV driving every time I drove home from work on a full charge, so I figured I'd use up as much of the old gas as possible before filling up, and perhaps wait for gas prices to start dropping.

I could have gone another couple of weeks, but I ended up stopping at a local Shell station last week to use the opportunity to get my eleven-year-old kid to pump gas for me. It's about time he starts earning his keep around here. He's expensive... when we go to Carl's Jr or Jack-in-the-Box after his weeknight baseball games, the boy orders something that has at least two beef patties, multiple strips of bacon, and a couple of slices of cheese, usually about five bucks or more, and I order two tacos for 99 cents. Oh, and he has to have fries too, and that's another buck. 

"Ya know, for less than six bucks, Jolt will take me all the way to work and back. That's like 80 miles. So, after you eat that burger and fries, are you gonna carry me 80 miles so we can give Jolt a rest?" I asked, as we wait at the drive-thru window for his exquisite cuisine to be meticulously prepared.

"Nope," he responded, staring out the windshield at nothing in particular.

"Okay, how about one-way, just to work? It's downhill."

"Uh, no..." he replied, still staring straight ahead.

Jolt, from Transformers: Revenge of the Fallen

"Fine." I conceded. He smirked as he turned his eyes toward me. He's starting to get the hang of my warped sense of humor. It was more fun when he took such requests seriously, but I guess we all have to grow up sometime. He's still into Marvel superheroes and Transformers, which is why our Volt is named "Ghost of Jolt", or just "Jolt". He really wanted us to get a blue one, a replica of the Volt-based Autobot in "Transformers: Revenge of the Fallen". However he knew that my obsession with white cars was unbreakable, so he didn't argue. Despite getting the wrong color, Jolt is still his favorite vehicle in the family fleet.

So I figured he wouldn't mind pumping gas for Jolt. In fact, he was pretty excited about it. We were on the way back from school after dropping off his science project, titled "At Which Angle Does a NERF Gun Shoot the Farthest?" (45 degrees, in case you're wondering). The Shell station was halfway between school and home, which presented a perfect opportunity to train the boy. But there were problems. The gas door wouldn't open, despite repeated attempts at punching the button and the dash indicating that Jolt was ready for refueling.

"Are you sure it goes here?" asked my beloved son, pointing at the Jolt's right rear quarter. He did something back there and then yelled, "Okay I got it!". By now a couple of folks were staring with curiosity. I nonchalantly got out of the car and walked over to the pump, where I slid my credit card and had him select "V-Power" and grab the nozzle. He stuck it in Jolt's filler and pulled the trigger, but the pump clicked off immediately. "Let go of the trigger and pull it again," I advised him. He did this a number of times, but the pump would just click. Click, click, click... like a six-shooter fresh out of bullets. "Let me try," I said, and he moved aside.

I shoved the nozzle farther into the filler, fighting against the vapor recovery sleeve all the way. Although not visible, I'm thinking that they used a spring from a coilover shock made for offroad vehicles to guarantee that this damn sleeve seats against the filler so tight that not one single molecule of noxious vapor escapes into the atmosphere. I pull the trigger a few times, the pump still clicks off.

"Are you sure it goes here?" he asked, again.

I sighed. "Yes," I replied, but I don't think he believed me.

By now, the same people that were staring looked more curious and actually seemed a tad bit concerned. Others started to notice our battle with the nozzle. I was afraid that a crowd would soon form and someone with an iPhone would post the whole ordeal and go viral. Some were probably wondering if we'd all be blown to smithereens in a few seconds as this clueless idiot with an electric car pumps 91-octane into a charge port that's expecting 240 volts. I actually doubted myself for a moment when my son questioned my judgement. Fortunately after finding the perfect angle, I got the pump to actually do some pumping. I let my son take over, but he didn't have the strength to fight the vapor recovery sleeve for very long. So I had to finish the job as he watched the display and asked him tell me when we were close to eight gallons. I didn't trust the pump to stop automatically when the tank was full since we were constantly fighting it and it was still clicking off every so often, even at the right angle and at a slower flow. At just short of eight gallons we declared victory, so my son capped the filler and shut the gas door as I hung the nozzle back on the pump.

"Well that was fun, wasn't it?" I asked.

"Yeah," he responded, chuckling as he smirked. "Thanks, Dad. I love you."

"I love you too, boy."

The Heat Is On...

"Wow, even your car was bitching that it was hot today," she said as she peered over my shoulder at a picture I took of the Focus Electric's dashboard. I chuckled. My wife can't stand this kind of weather, and neither does the Focus Electric, nor any other electric vehicle for that matter. 

It didn't feel that hot, really. Even after a brisk five minute walk in direct sunlight to my fully charged Focus Electric, there wasn't a drop of sweat on my forehead. And yes, I was fully clothed, in a black short-sleeved polo and blue jeans. I guess it was a dry heat. So I was really surprised that the temp readout in the FFE was reporting that we were in 101-degree heat.

I was in a meeting at Cal State Northridge while my beloved Focus Electric was sucking up some free juice out of a Chargepoint EVSE on campus. After two hours, during a meeting break, I took the car off of the charger so others could also enjoy some of that free juice, and pulled into an empty parking spot that's been absorbing the heat all morning. After one more hour, we left campus fully charged in that 101-degree heat, and made a stop at a nearby gas station for a quick three-dollar car wash.

The warning message came up the instant I powered off at the gas station. Just for kicks, I cleared the message, powered back up, then shut down again. Same warning message reappeared. "Good," I muttered to myself. At least the behavior was consistent rather than sporadic, which in my mind proved that the car's complaint was legit. So I kept the car turned on while the foam and pulsating sprays of water washed off layers of tree pollen and road dust, instead of shutting down like I usually do. Keeping the car powered up, I postulated, would let the battery's thermal management system work on removing any heat that was soaked up by the battery while parked unplugged on hot asphalt for that last hour. After the quick wash, we headed to work, which was a good 15 degrees cooler than CSUN, so the warning message did not reappear for the rest of the day.

UPDATE: Turns out the warning message seems to be tied to the ambient temperature and not the battery temperature, so in hindsight I'm pretty sure I had nothing to worry about. See this post by michael on myfocuselectric.com (thanks michael!). Equipped with an OBD scanner, he observed that in one case the battery temperature was in the low-80F range when the warning message popped up.

The user manuals for each of our electrics - a Focus Electric, a Volt, and a RAV4 EV - have something to say about parking in the hot sun - which is to plug in, if you can, while parked outdoors in hot weather. But none give any hint at what we should do if the opportunity to plug in just wasn't there.

Last summer I figured out a mitigation approach for parking outside on hot days that works quite well on the Focus - that is to keep the battery at less than full charge - at something like 80% or so - and remote start the car before the battery pack gets too warm. I first realized this might be an issue when, in the late evening following a hot 105-degree summer day, I noticed that the Focus Electric, while sitting on our driveway, was sending me email hourly since about 3pm telling me to plug it in. But instead of plugging in, I remotely started the car, then let it time out and shut down. That stopped the hourly email warnings; the theory is that the thermal management system (TMS) would kick in and bring the battery temp down to a level that was low enough to prevent the rest of the day's heat from elevating the battery temperature up to an alarming level. On subsequent 100+ degree days that summer, I kept the state of battery's state of charge at 50% to 80%  and remotely started the Focus Electric at  about 1pm-3pm, which ran the TMS for about ten minutes. I received no email alerts from the car on those days, so the scheme apparently worked.

The best practice, of course, is to keep the EV plugged in while parked in the driveway on days like this, but sometimes I forget to do that, and now I have a backup plan. Which did come in handy yesterday, since my Volt was sitting in the driveway, fully charged. So at about 3:00pm I jumped onto myvolt.com to remotely start the Volt an let it run for ten minutes, just for good measure. Probably really didn't need to do so, since the ambient was only 93F at home, not at 101F, and the Volt has a lot more buffer built into its battery management system than the Focus Electric - it only uses about 10.8kWh of the 16kWh battery's capacity (~65%), where the FFE seems to use a larger percentage - about 19.8 kWh of its 23kWh capacity (~85%), with most of that buffer allocated to prevent full discharge. Unfortunately the Volt doesn't seem to have the same warning capabilities as the FFE, so I'm not sure if I'll ever be able to know when the Volt thinks it's too hot outside. Fortunately, a member of gm-volt.com wrote up a great article on this subject - quite impressive, with graphs and real data - which leads me to believe that the remote start scheme will work just fine for the Volt.

As for the RAV4 EV - I wasn't worried about that one this time, since my wife was out and about throughout the day, so its TMS was engaged a fair amount. And the RAV4 EV's "full" charge utilizes only 80% of its battery capacity, much less than the purported 90% of the Focus Electric's capacity utilization. I did remotely start it earlier in the week though, when the temps first started approaching 100F, just to be on the safe side.

So, long story short (yeah, too late like usual), it's best to keep your EV plugged in while parked in the hot sun, just like the manual says. If you can't do that, my advice is to try to keep the state of charge (SOC) under 80% (50% is optimum), and remotely start your EV and let it run for about ten minutes, before the battery temp is heat-soaked to an alarming level, which should be something less than 86F (read this article if you want to know why 86F and less than a 100% SOC is important). Finally, if you park in a spot that's been soaking up solar rays all morning, your battery's temperature could possibly reach an alarming level faster than if your EV was parked there all night and shading the ground below it all day, depending on how well the bottom of battery (or batteries, in the FFE's case) is insulated.

There are, of course, other religious beliefs that various early adopters follow to keep their batteries healthy well beyond the 8-year or 10-year / 100,000 mile warranty and to prevent degradation that's not covered as a warranty defect by the manufacturer. On one end, some folks do nothing because they believe that the TMS (if equipped) and battery management system are good enough, or they simply don't give a damn because they have a 36-month lease and in the end it's not their problem. On the other end, there are those that advise others, typically know-it-all evangelists that have yet to purchase or lease an EV, that will tell folks to move to another state or just forget about driving an EV in Southern California, Arizona, or any other arid climate. I say ignore the extremists, for there is a happy medium. 

The Disney Experience

This year, our original Spring Break plan was for us to take the boys on a six-day road trip to Flagstaff, Arizona and back to visit relatives that just moved there. About a thousand miles round trip, with detours to the Mojave National Preserve and Vegas or Laughlin to break up the trip there and back. With four vehicles in our family fleet, surely one would fit the bill, right? Well, the two BEVs - the Focus Electric and RAV4 EV - were out of the running. Both work incredibly well for the daily commutes that they were meant to serve, but their range limitations keep them from being used for day-long treks. That left the Volt and Ram Quad Cab. My wife cringed at the thought of spending hours on end in a small sedan like the Volt, and I balked at spending $300+ on gas for the truck to make the trip. The solution? For about $250 I could rent a 50mpg Prius V, or perhaps a 4-cylinder cute-ute, i.e. an ICE RAV4 or Escape, that nets 30+mpg on the freeway. Rental fees and gas would add up to about $50 to $75 more than gas for the Ram, but I like driving other people's cars once in a while anyway.  Problem solved.

Unfortunately, that plan was thwarted when it looked like we would have to be back in town much earlier than desired, due to last-minute scheduling of a doctor appointment, a critical meeting at work that I didn't want to miss, and a much-needed batting practice for one of the boys. We now only had three days available for a road trip, so anything out-of-state was out of the question. So I thought... why not take a BEV vacation?  Our destination would have to be less than 100 miles away - within the range of our RAV4 EV - and have a suitable charging infrastructure so we could juice up for the ride home. My wife chuckled. "Right, so where could we possibly go?" she asked.

I knew it was somewhat of a rhetorical question, but I answered anyway, with a hint of sarcastic enthusiasm. "Well, there's Bakersfield. Or Victorville. Lancaster, maybe even Mojave if we push it. Oh, I know... how about Riverside?"

She scoffed, as expected. She's not a big fan of dry heat and tumbleweeds.

"Or... we could go to Disneyland," I suggested.

"Oh, I like Disneyland," she responded.

And so it was decided. Naturally, the boys would be more than just fine with it.

I figured that would be her answer, so at that point I already researched charging opportunities in Anaheim. Turns out that Disneyland has ten 2-port Chargepoint L2 EVSEs, with positive reviews in plugshare.com. Which is quite fortunate, because from what I could see, none of the hotels in the area claimed to have any L1 or L2 charging provisions. I was still a little worried though, since we didn't have a backup charging location in case Disneyland's EV spots were all occupied or inoperative. So just for good measure, I charged the RAV4 to 100%, aka extended charge, instead of the usual 80%, netting an expected 120-mile range, give or take. We live 59 miles away from Disneyland, so theoretically we could make it there and back on one extended charge if we really had to; worst case I would just have to look for a place to stop for an hour or two on the way home.

Like anything else that is Disney, it was a glorious sight, and of a grand scale... I spotted the row of over 20 EV charging spots, backlit by bright sun shining through an opening between the high ceiling and a ramp from the second floor. Easy to find, after paying $16 and obtaining directions from smiling cast members, then following the signage on the ground floor of the Mickey and Friends parking structure. It was by far the biggest EV charging site I've seen to date. Also in proper Disney tradition, the charging fees were pricey, at 35.5 cents per kilowatt-hour. Sure, that's about  the same as charging a Volt or Energi on a $1/hour public EVSE since they have 3.3kW chargers, but that's twice the price or more if you have a BEV with a 6.6kW or better on-board charger. It's almost as bad as paying $3 for a bottle of water or $4 for a bag of Cheetos, or over $90 to get through the front gates. Almost, but not quite.

As far as availability, turned out I had nothing to worry about... on late Wednesday morning there were only two EVs juicing up when I got there, a shiny blue Fit EV and a Volt. Thursday was a slightly different story; only six EV spots were left by the time we got there at 1pm. Several were taken by Volts that weren't hooked up, and one holier-than-thou Model S driver thought he deserved two spots. Someone needed to bring their old beater car and park it so close to that Model S that its door handles would have had no room to perform their erection routine. Is it really that hard to back into a space? I do it all the time in the RAV4 EV. What a jerk.

Other than that, the overall EV experience at Disney was just fine. The EV parking spots are carved out of the existing huge disabled parking area, so it's relatively close to the tram that takes you to the front gates of the Disneyland, California Adventure, and to Downtown Disney.

With only six spots left on a pretty light day -  crowd index in the parks ranged from 51 to 67 per that invaluable Mousewait app - I'm wondering what the Disney charging situation is like on busy weekends. Fortunately I won't have to find out. But with the year-over-year increase of EVs in California, there may be a need in the near future for them to somehow enforce etiquette, or perhaps just install more EVSEs. I think the smartest thing for them to do would be to install 120v outlets and provide free L1 charging. They can easily make their money back on the install since folks on L1 chargers would probably stay longer and buy more of those three-dollar bottles of Dasani and four-dollar bags of Cheetos.

I'm sure they'll do something. Disney has always been great at improving and enhancing The Disney Experience for locals, tourists, and those with special needs. And they're certainly off to a good start on taking care of early adopters like us.

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RELATED ARTICLE: Return to the Magic Kingdom - Charging at Disneyland on a crowded day

Sticker Shock

Woohoo! Got my green stickers, baby! It was getting a bit dicey there…. one of the reasons why I got a Volt now instead of later is because those California HOV stickers were running low for qualified plug-in hybrids and extended range electrics. Back in January there were over 7,000 of the available 40,000 stickers left, and by the end of last week that number dwindled down to under 4,000 remaining. I applied for my sticker as soon as I could – the day I got my plates, about a month into the lease – then monitored my bank account on a daily basis looking for a check cashed in the amount of eight bucks. Meanwhile, the depleting sticker supply debacle was getting more and more attention in blogs and articles. To make things worse, more dealers were getting into the act of ordering stickers en masse for cars they had in transit from the factory. It didn’t take long to have second thoughts about not leasing my Volt from one of the big dealers in the Valley that pre-orders stickers, even if it would have meant abandoning the great lease terms I got from a local dealer. At my lowest point I even wished I had not picked up the Volt at all, that I should have just kept driving the Focus Electric 18,000 miles a year, which at 20 cents per mile over 12,000, would have resulted in almost $4000 of excess mileage charge over three years, instead of taking on the Volt for a mere six cents per mile more.

Despite the risk of such significant financial penalty two years from now, I started neglecting the Volt most of the week, like I did with the Mercedes it replaced, in favor of commuting with my white-stickered Focus Electric in the HOV lane. Spending over three hours a day crawling on the 405 in the Volt just wasn’t as appealing as flying in the Focus Electric at proper freeway speeds while the rest of the world around me stood still. At any price. As the weeks of March passed, seeing more and more Volts on the road with no plates and pre-ordered green stickers on their bumpers further convinced me that I probably made a costly mistake.

Eventually the planets aligned. On Wednesday of last week I logged into my checking account like so many countless weeknights prior, and there it was – a tiny icon that was a scanned image of an eight dollar check payable to the DMV. That meant arrival of my Volt’s green stickers were imminent, and that my daily obsession with online banking would transition to manically sifting through a pile of snail mail that my wife so thoughtfully places on my side of the kitchen table before I get home from work (I love that girl!). But the following night as I made a beeline from the front door to the kitchen I couldn’t see the stack of mail…. my wife was standing in front of the table with a firm stance and cold stare. If I were a dog my tail would have instinctively curled under my hind legs, head lowered as I slowly back away. “Uh oh”,  I thought. She held up an envelope and sternly asked, “Why are you getting mail from the DMV? You did NOT buy another car, did you???”.

I was relieved. Because I did nothing of the sort, this time.  She’s a bit sensitive about my craigslist buying binges, and is probably harboring a fear that my obsession has moved back to cars. Over the past couple of years, my weakness has been with guitars… now there are over 20 guitars lining the walls of  my man-cave, bought from aspiring rock stars that moved on to other pursuits, professional musicians that upgraded their gear, and folks that otherwise don’t want to spend the time nor resources to fix broken instruments – probably half of the collection required mild restoration, i.e. snapped necks, failed electronics, sometimes just a simple paint touch-up. After getting two electric vehicles so far this year, one in January and the next in February, I suppose her angst is justified.

Surprised and delighted about the DMV mail, I snatched the envelope from her hand and ripped it open. “Stickers! Look, I got my stickers,” I  clearly explained, waving the shiny green holographic treasures just inches from her face. She rolled her eyes and stepped aside, opening up my path to the kitchen table, where I got on my son’s laptop and started googling for pictures of Volts with HOV stickers to help me visualize how I should install these things. In all these weeks of waiting, I didn’t have the sense to finalize exactly where they would go once I got them. Between eating dinner, cleaning up, and putting the boys to bed, it took all night to decide and then to install the stickers, but by midnight the Volt was armed and ready to take on the HOV lane for the Friday morning commute.

Since then, I’ve been commuting with the Volt exclusively to get a jump on minimizing excess miles on the Focus Electric lease.  With the stickers installed and 50% higher average speed achieved in the HOV lane, the Volt now needs about a quart of gas per day on the 38-mile, 1200-foot climb back home after being fully charged at work… in its pre-sticker guise it took at most a pint, and with the weather warming we were actually starting to make it home without waking up the ICE. A small price to pay for spending one less hour on the freeway, I suppose.

I’m guessing that the depletion of the green sticker supply will slow momentarily because as reported by Inside EVs,  the DMV has suspended the program that allows dealers to obtain those stickers prior to sale. This is good news for those dealers that don’t pre-order the stickers as well as for consumers that shop around for the best deal. Even better news is that there’s a bill to increase the number of green stickers that can be issued, exact quantity is apparently yet to be determined. With any luck, it will be enough to cover introductions of the rumored Focus Energi and imminent next-generation Volt. Because after one solid week of driving my Volt, I’ve realized that it has a few shortcomings that keeps me from wanting to keep it longer than its lease term. More on that later.

Indoor Plumbing

“Celebrate now, knowing that one day EVs will be as common as indoor plumbing, and there will be no reason to celebrate.”

That’s how I wrapped up a post last September on supporting National Plug-in Day, titled “It’s Just a Car.”

It’s now February 2014, and as one might expect, EVs still have a long, long way to go to achieve the popularity of that very essential porcelain throne found  in every first-world home, thankfully invented by Sir John Harington in the 16th century, then improved by Thomas Crapper in the 1800s. But on this little patch of real estate that my family and I call home, that far-fetched day has come to pass. Three plug-in electrics are now parked in the driveway of our four-bedroom, three-bath home. An EV to match every toilet in the house, that was my goal, and that’s why they’re all white.

Of course I’m joking. It really happened because I’m a cheapskate, plain and simple. Just ask my wife, she will nod in affirmation while laughing hysterically.  A little over a year ago, we were shelling out over $500 every month for gas. When the Focus Electric joined the herd, our gasoline consumption was cut by over a third. This year, after replacing the Focus Electric’s aging ICE backup with a new Volt in January, then trading in my wife’s 2013 Honda Pilot for a fresh RAV4 EV last Sunday, our gas bill should be less than $20/month.  Twenty bucks should cover four gallons of regular to be consumed by an ’07 Dodge Ram Hemi driven maybe once a week at the most, and about three quarts of premium since the Volt, which will serve as a commuter twice a week, needs somewhere between a cup and a pint of gas after its battery is depleted to complete the 38-mile daily trek back home that takes me from sea level to all the way up to a 1200ft elevation.

Commuting daily in the Focus Electric consumed about $60 of electricity per month last year. I expect that to increase slightly with using Volt for two out of the five commuting days since the Volt has a slow 3.3kW L2 charger that costs me about 40% more than the Focus to fully replenish when hooked up to the $1/hour L2 EVSEs at work. The RAV4 EV, serving as our new Mother Ship that’s used to chauffeur the boys around town and run errands to the big box stores, shouldn’t cost more than $30/month to charge nightly, so in total I’m guessing that we’ll be spending about $100-$120/month on electricity and gas, much less than the $500+ per month that we were spending at the pump back in 2012.

I knew that as a household we would eventually end up transitioning to mostly electric, but not this soon. Maybe in several years, when choices should be even more diverse and battery costs should have fallen even more. What drove the urgency is that the 40,000 California HOV green stickers for plug-in hybrids and EREVs are running out by this summer, and so far there has been no indication that CARB will increase that. Another thing that’s expected to deplete in a matter of months is the RAV4 EV; expectation is that Toyota is building only 2600 … so when Carson Toyota advertised killer lease deals with zero drive off and payments that were nearly equal to our lease payment on the 2013 Pilot, I signed on the dotted line.

So that’s really the  reason why we have three EVs in the driveway. It all comes down to saving pennies. Forty thousand pennies every single month, in my case. And as a bonus, I’m helping to save the planet, which is cool. Nothing to do with indoor plumbing, except for the fact that I hated flushing so much hard-earned cash down the Crapper.

Apples to Apples

For the uninitiated, comparing one lease to another can be confusing.  I don’t claim to have all the answers, but I can share one  simplification that might help to make a decision that is right for you.

When comparing leases, I think that the easiest and quickest comparison is to just add up what you’ll be shelling out over the next three years, all the way to lease termination. This includes the total drive-off and all the monthly payments. You can also add the lease termination fee, but often that’s not provided on the web page or newspaper ads. Seems to be about $400 these days.  I usually ignore it since I end up trading in the car rather than turning it in. When comparing leases for the same vehicle from the same financier, it washes out so I won’t consider it here.

Let’s take a current example in Los Angeles area newspapers today. One of the Valley dealers is advertising two three-year 10,000 miles per year  leases on a base 2014 Volt: One is $287/mo+tax, $0 due at signing, the other is $179/mo, $3990 due at signing. And via email, the local dealer in my area is advertising $159/mo, $4000 + taxes + fees to start. So to compare:

• Lease 1: ($287+$25.83 tax) * 35 payments + $0 due at signing = $10949.05
• Lease 2: ($179+$16.11 tax) * 35 payments + $3990 due at signing = $10818.85
• Lease 3: ($159+$14.31 tax) * 35 payments + $4000 + $246 tax on rebate and first pmt + $350 license fee = $10415.85

Over 3 years, Lease 2 is over $100 cheaper than Lease 1, and Lease 3 is over $500 cheaper than Lease 1, but as a rule I always go for $0 at signing if possible since I can reliably make over 10% in dividends a year on REIT stocks. Over three years, that $4000 would make me about $1200 (about $400/year), more than enough to cover the extra $100 – $500 I’d pay out over the three years on Lease 1. Another perhaps more compelling reason to minimize the drive-off payment is in case I want to trade in the car well before lease termination, say after two years. In that case, Lease 1 with $0 due at signing lease would have cost me $7507 over two years. Compare that to Lease 2… its high $3990 drive-off and 24 months of payments would have cost me $8672.64 – over $1000 more than Lease 1 after 2 years! Lease 3 comes out the worst of all: $8754.44 over the first two years. Given the above scenario, I’d go to the local dealer and tell them I want a $0 out of pocket lease where the payments add up to about $10,415 and see what they come up with. My bet is that they’ll quote something within $100 of that.

All of these leases are better than Chevy’s website deal – $269/mo, $2679 due at signing, plus tax, license, and fees. That comes out to ($269 * 35) + $2679 + tax, license and fees. That’s $12094 over three years. Tax of 9% on the $2575 rebate and the 36 payments (first payment is part of the drive-off) is about $1113, and license is $350, which brings the total of $13557 after 3 years, which is over $2700 more than the above leases (!). It’s horrendous, but good to know when negotiating with the dealer. It serves as a shining example of what NOT to pay.

So in my case, last month I was able to get a $0 drive-off, $267/mo lease (tax included) for a 36-month 10,000 miles/year lease on a base Volt from my local dealer. After all 35 payments, that’s $9345… about $1100 – $1500 off of the above dealer-advertised offers and over $3700 off of the corporate offer. I’m not bragging… just trying to give you a sense for what is possible. I suspect that my deal would be fairly easy to beat at this moment since dealer inventory seems to be up since last month and there’s a $1000 voucher you can get on the Chevy website that can be applied to the cap reduction cost, which should lower monthly payments by $30 or so.

Hope this helps… it really is that simple – just add up the total 3-year cost to get a decent comparison between leases.

Now if you’re thinking of keeping the car after lease end, it gets a little more involved. You’ll have to add the residual cost, plus tax on that residual cost, to the 3-year total, then compare that total between leases. But if you’re looking at a Volt, beware… the banks that offer the leases on Volts set unreasonably high residuals to lower the payment – about $7500 high it seems, equal to the federal tax credit they are pocketing. Leases on the Focus Electric and RAV4 EV are much more palatable since the fed tax credit is given immediately to you in the form of a huge rebate, so you get the benefit of a low payment and a residual value that is much closer to the anticipated market value of the car after 3 years.

In the near future I’ll blog some thoughts on comparing leases between competitive models (i.e. Volt vs FFE vs Leaf vs ???) and on deciding between a lease vs loan vs cash purchase.

Window Shopping

Yup,  I went window shopping last Sunday. Came home with four windows, four doors, a windshield, and a hatch.

That wasn’t the plan. I didn’t think I was taking delivery of a 2014 Volt until late next week, perhaps later or not at all if negotiations failed. I was working all of last week with one of the big-volume dealers in the Valley, mostly by phone and text, after visiting them on MLK day to check out the fully loaded Volt in their showroom. The exact car I wanted was in transit – a Summit White Volt with a black leather interior. I had a firm idea of what I wanted to pay for a 3-year/10,000 mile lease: $270/month plus tax, $0 drive-off. When the salesman called back with a $301/month + tax offer, I let him know that I was expecting a lower payment based on my calculations using the $3000-under-invoice offer that the dealer advertised on the Volt forum. I  wanted to pay no more than $300 including tax, so their offer was more than $1000 higher than what I was willing to cough up over the next three years. I asked if he could give me the details of the lease – specifically the gross capitalized cost, since that represents the sales price, and the capitalized cost reduction – but I didn’t get a call or text message with the information. After a couple of hours I got tired of waiting.

Coincidentally, the other big dealer in the Valley posted an ad on the same Volt forum. Their posting parroted the Volt lease terms that headlined their weekly sales ad in the local papers, delightfully complemented with a long list of the numerous Volts they had on the lot and in transit. I noticed that they too had the white-with-leather Volt of my dreams coming their way. I emailed the internet manager of that dealer with the lease terms offered by their competitor on the other side of the freeway. After a couple of email exchanges and a phone call from her salesman, they quoted $302/month, a buck more than the first dealer… but theirs also had the $525 safety package that includes a backup camera, which would be nice to have, but frankly I didn’t want to pay for it. After all,  that feature came standard on my Focus Electric, my wife’s Honda Pilot EXL, and her Sienna LE before that, so it just seemed wrong to have it as an option nowadays. I was really close to caving in and taking the deal anyway; fortunately I refrained and told the salesperson that I wanted to sleep on it and that I’d call him in the morning.

When I woke up the next morning, my intent was to head down to the Valley to try to negotiate a better deal in person with one or both dealers. Failing that, I would give up on getting a Volt for now and call Dianne at Carson Toyota about a RAV4 EV.  I figured that if I had to blow my budget, I’d blow it big-time on a Tesla drivetrain and lots of cargo space.

While I was getting ready to leave for the Valley, a salesperson from the local dealer called… which greatly annoyed me because I was in a rush to leave. I started chewing him out for not calling me when I first reached out to them last week, then went on and on about the deal I was trying to close that morning with one of the big Valley dealers, and then declared that there’s no way he can beat their deal because he doesn’t have any with Volts with leather only; all he had were fully optioned ones that were close to $40K. He asked if I would like a white one with a black cloth interior. I told him absolutely not, and ranted even more about how he simply does not have one in stock that I want.  I continued by telling him that if I can’t get the lease terms I want from one of the Valley dealers, I’m done with looking for a Volt anyway and will be going for a RAV4 EV. I was on a roll. He tried to interject, but I kept cutting him off.

Then, with one very sincere, personal apology, he calmed me down. As soon as he got my attention, He enthusiastically asked me if I had ever seen one with cloth, and that it actually looks great in black.  Then he asked me if I’ve driven the Volt yet. I paused for a second, then realized how unreasonably I was acting, because I certainly had done neither. He urged me to come to the dealership to see it, drive it, and give him a chance to beat the offers I had in hand. So I told him that I do qualify for the competitive lease rebate and GM employee discount, and promised that I’d hold off going down to the Valley for a half hour to let him work his offer.

Meanwhile, I called back the Valley dealer that has the safety package Volt, let the salesman know that I will drive down there immediately if he can close on $270/month + tax. He said he’ll have his manager call me.

Minutes later, the salesman from the local dealer called back and did the unexpected… he offered $269/month for 35 months, $0 due at signing. Including tax. That’s $247/month before tax. I was stoked – that was more than $50/month below the other two offers! I told him that I was impressed, and that I’d call him back before noon with a decision. I braced myself for a barrage of high-pressure tactics to force an immediate decision, but instead was left with a message of hope and opportunity. He thanked me for giving him a chance, said he’d be there for the day.

In short order, a manager from the Valley dealer called back. I told him about the local dealer’s offer on a base model, then rationalized that the MSRP of his incoming Volt with leather and backup camera was about 6% higher than for a base model, and that my $270/month  + tax my for his car was over 10% higher per month than what the local dealer quoted on a base model, so therefore my counter-offer was reasonable. The manager explained that the pricing structure is different for the cars with options, and that essentially their first and only offer of $302/mo plus tax is their final offer. I thought about it for a second, then decided I didn’t want to shell out and extra $50/month for the privilege of sitting on a dead cow every time I climbed into the Volt. I thanked him for his time and hung up.

I called the local dealer and said I have 30 minutes to spend with them before I needed to go back home and take care of some things. The salesman had the car waiting for me before I arrived, just outside the tall glass walls of the dealership. I was sold as soon as I laid eyes on it, but figured I’d better check out the cloth interior and drive it for a few blocks before inking a deal. So we took it for a spin…. The cloth looked and felt just fine, and in Sport mode  the Volt moved with the spunkiness of the Focus Electric. Fifteen minutes later we were back in the dealership to start the paperwork.

There’s only so much paperwork that can be done in fifteen minutes, but I really had to leave and couldn’t come back until about 5pm. The salesman handed me the keys to the Volt and had me sign a no-cost loaner agreement, said he needed me to take the Volt so that someone else couldn’t snag it from under me. Naturally, I obliged. When I returned later that day, I was taken straight to the finance office, and in 10 minutes the Volt was mine. In the end, the deal came out to be $267/month for 35 months, $0 at signing.

My local Chevy dealer really came through for me on this. Besides providing me with a great lease, they saved me from three 40-mile round-trip excursions into the Valley to work the deal, pick up the new Volt when it arrives, and then retrieve whichever car I took to the dealership to pick up the Volt. They treated me with courtesy, respect and efficiency, even after I started off on the wrong foot by chewing them out over the phone for taking so long to get back to me after I initially contacted them.
In retrospect, I do feel really bad about flying off the handle… especially today, after I sifted though unheard voice mail on my cell phone. Turns out that a manager from my local dealership had called me right after I reached out to them through edmunds.com; I just missed the call and didn’t bother to check voice mail.

Now it’s my turn to deliver a sincere, personal apology.